May 26, 2020

AFVentures Inaugural Cohort

Part One: Arrival

“There’s a way to do it better - find it.” 
― Thomas Edison

“Welcome to San Francisco International Airport. Thank you for flying with us!”

A few minutes after the pilot welcomes you to San Francisco, your plane pulls into the gate and the flight attendants open the cabin door. As you grab your carry-on and step out of the plane, you catch a glimpse of February weather in San Francisco; sunny, blue sky, and about 55 degrees fahrenheit. Quite different from winter weather at the Air Force Base back home—cold, windy, and a bit dark.

The terminal has a variety of people coming and going, but among the throngs of travellers you notice many in uniform—just not the flight suit or camouflage that you’re used to seeing at work. Here the uniform is emblazoned hoodies and jeans worn by the frontline engineers of the technology industry, or the occasional performance fleece often favored by venture capitalists.

Two months ago, you never would have guessed that you’d be spending the second half of winter in Silicon Valley. In late 2019, AFWERX, the Air Force’s program to accelerate innovation across its organization and to facilitate connections between industry, academia, and the military, sent out notices across different Air Force channels announcing a new industry immersion program called the AFVentures Fellowship. Developed in partnership with Shift, the San Francisco technology company that enables veterans to make career changes, the 6-week Fellowship had been created to help the Air Force and Department of Defense develop and evolve its capabilities and credibility in non-traditional industries.

Intrigued by the focus area of the first cohort of Fellows, investment and risk management, you received conditional approval from your commander and applied for the program which was open to officers, enlisted, and civilians across the Air Force Active, Reserve, and Air National Guard Components before the Winter holidays. Shortly after New Years, you received an email from Shift notifying you that you had been accepted into the program. A week after confirming your attendance, you were matched with your host, one of the 20 venture capital firms or their portfolio companies who had eagerly volunteered to host the inaugural cohort of AFVentures Fellows.

Now, a few weeks later, you have arrived in San Francisco ready to embed yourself in the world of venture capital and startups. Your mission, along with the 20 other Fellows arriving that weekend, is to discover the organizational and business methods, technologies, and capabilities powering the new economy startups in Silicon Valley. In other words, you are a sponge for new ideas, striving to think differently and opening your mind to ways the Air Force could further innovate to achieve its mission for the country. 

You grab your suitcase from baggage claim and order a car from one of the many ride-sharing apps to head to your hotel downtown. You still have a bunch of pre-reading to do and wanted to get in a run to see the Golden Gate Bridge before dinner. 

Part Two: The Cohort & Fellowship

“Maximize flexible workforce authorities that allow pathways to expand expertise, such as sabbaticals with academia, internships and training with industry, and entrepreneurial sabbaticals, creating pilot programs if needed.”
2019 USAF S&T Strategy

After a highly competitive process that evaluated applicants across 55 different experience dimensions, 21 Fellows were selected to join the inaugural AFVentures Fellowship. This first cohort, made up of 52% men and 48% women, arrived in San Francisco representing the spectrum of the Air Force mission and domains, including program acquisition, special operations, air operations, intelligence, space, as well as international tours and combat experience in Afghanistan and Iraq.

2020 Inaugural AFVentures Fellows

The Curriculum

Prior to their first day in San Francisco, the Fellows became acquainted via their Slack group, which enabled them to coordinate hotels and local information, as well as share professional connections through Silicon Valley with one another. Fellows also participated in a curriculum developed by Shift to both prepare and compound the Fellowship experience before, during, and after their immersion with their host company. 

The curriculum delivers to Fellows an introduction to the venture capital and risk management industry and provides them with an overview of the logistics, responsibilities, and objectives of the Fellowship. A series of webinars, readings, discussions, talks, and an orientation day at Shift’s headquarters help each Fellow reconnect with their creative self, an incredibly important useful tool needed to identify opportunities that might create value for the Air Force. 

A number of resources such as articles, podcasts, websites, and apps were shared with the Fellows prior to arrival, including some required reading:

  • Venture Deals, by Brad Feld, discusses how venture capital deals are structured. 
  • VC: An American History, by Tom Nicholas, was recently recommended by Marc Andreessen of a16z (a Shift investor) as one of the best books for understanding how the VC industry came to be what it is today.
  • Iconoclast, by Gregory Burn, a neuroscientist, talks about how the brain needs to function in order to think differently. 
  • Whack on the Side Of the Head, by Roger Van Oech, talks about breaking down mental blocks to unlock creative thinking.
  • Zero to One, by Peter Thiel, is about startups and the entrepreneurial mindset needed to do something that has never been done before.

Host Matching

Each Fellow was specifically paired with their host organization using an adaptation of Shift’s proprietary matching technology, which is used to help newly-transitioned veterans discover private sector jobs that take full advantage of their military experience. In many ways, Shift has created a capability to model and filter the Fellows across emerging career paths and technology focus areas that had yet-to-be formalized within the Air Force, including: biometrics, cybersecurity, drone and sensor development, simulation technologies, mental health, wellness, and resilience.

Part Three: What They Did

“Until you make the effort to get to know someone or something, you don’t know anything.” 
― Ben Horowitz, Co-founder and General Partner, Andreessen Horowitz, from The Hard Things about Hard Things

AFVentures Fellows spent most of their six weeks immersing themselves in the Silicon Valley venture capital and startup ecosystem, but they also had additional responsibilities to the Cohort. Fellows were required to keep a weekly journal where they reflected on experiences, participated in weekly cohort events with industry leaders, completed a research project for their host organization, and delivered a capstone project at the conclusion of a program for the Air Force.

A Day in the Life as a Venture Capitalist

There is no typical day in Silicon Valley and the Fellows were challenged from day one to adapt to a new environment and office culture as fast as possible. Each of the Fellows had a number of goals in mind during their six weeks with their host company:

  1. Develop an understanding of how their hosts assess and manage risk by exposing themselves to as many typical venture capital activities as possible. This might include attending board meetings with portfolio companies, drafting investment memos, evaluating pitches and reviewing business plans from startups seeking funding, and performing market research and trend analysis.
  2. Familiarize the firm with the Air Force and the Department of Defense missions, including ways in which the DoD works with industry and invests in research and development of future capabilities, and how the experience of military service members can be valuable additions to an organization. 
  3. Create meaningful relationships with the members of their firm and technology community. Lots of coffee meetings, discussion, cold emails, introductions, and conversations over shared meals. 

Demonstrate competency of investment and risk management by producing a valuable deliverable for their host organization.

Some of the Fellows researched and interviewed the portfolio companies of their hosts to outline prospective government go-to-market strategies. Every participating venture capital firm had a portfolio of dozens to hundreds of investments in startups, and Fellows were asked to identify those who had the most potential to bring impact to the Department of Defense. Kaly McKenna and Brian Hasbrouk worked closely with the Market Development team at Andreessen Horowitz to create a “builder’s guide” to working with the Department of Defense that will connect their portfolio directly to our nation’s most pressing challenges. 

Other Fellows ended up researching specific emerging technology trends. Steve McDermid of Emerson Collective was interested in the dual-use application of specific satellite applications and worked closely with Brian Wolff to conduct research and analysis. After being paired up with Robby Peters at SemperVirens, Sarah Soliman interviewed dozens of CEOs and founders of the best emerging companies in workforce, healthcare, and financial technology. 

Finally, other Fellows were tasked to research the viability of a newly-proposed, major initiative or project being incubated by their host organization. Mike Benitez joined Atomic and Abby Barger joined Expa to research and prototype companies that the General Partners were interested in starting.

Fostering Connections Across Silicon Valley 

While the Fellows spent their days embedding themselves with their hosts, evenings were often spent bringing the Cohort together to foster connections through a number of planned events organized by Shift, host companies, and the Fellows themselves. These experiences were designed to create “industry insiders” quickly. 

The General Partners at Catapult Ventures, Crosslink Capital, Forerunner Ventures, Emerson Collective, representing billions in collective investment capital under management, hosted a number of breakfasts, lunches, and dinners for the Fellows. Chief Operating Officer Healey Cypher from Atomic and several co-founders of their portfolio companies hosted a reception, to include Luke Finney, a Navy veteran who founded Terminal at Atomic less than a year after leaving the military and has raised more than $27M in venture capital in the past few years. 

Inspired by their mission and host experiences, the Cohort themselves began to organize their own meetings and receptions with defense innovation leaders like In-Q-Tel, the Defense Innovation Unit, BMNT Partners, Second Front Systems, the Stanford Entrepreneurship Network, as well as daily opportunities to visit and share their experiences with one another at their host organizations. 

At the midpoint of the fellowship, the General Partners of Alpha Bridge Ventures hosted an unforgettable evening where participants shared their challenges in adapting to the demanding pace of a new industry and participated in activities to develop trust, empathy, and resilience.

Other notable events included a visit to The Information to meet Jessica Lessin and discuss the intersection of venture capital and journalism, a tour and reception at Draper University, breakfast at Airbnb with Chief Ethics Officer Rob Chesnut, and an unforgettable afternoon in Mill Valley with Brit & Dave Morin.

At the end of the Fellowship, just prior to when COVID-19 locked down the country, Jillian Manus of Structure VC led an all-day capstone offsite at the historic RAK Ranch Napa Valley where Fellows split into small teams and prototyped five technology startups from ideation to go-to-market strategy.

Part Four: What They Achieved

“With Shift, we’re building the up-skilling bridge between technology and defense. These relationships will last our entire professional careers, and hopefully make us stronger as a nation.” 

― Larsen Jensen, Co-founder and General Partner at
Harpoon VC

By the second week of March, the final week of the Fellowship, many of the Fellow’s host organizations had already moved to remote work due to COVID-19. The Fellows were recalled to their bases to finish out the final week of their fellowship virtually a day before the Secretary of Defense issued a global stop-movement because of the pandemic.

In spite of the immersion program being cut short, the feedback from the Fellows and their hosts has been encouraging. Every VC firm who participated as a host expects to host at least one more Fellow in the next year and the interest spurred by the inaugural cohort across the entire tech community has created a waiting list of prospective firms who hope to host a Fellow in the future. 

We also estimate that the work our Fellows did to connect portfolio companies to new federal revenue opportunities (like the AFWERX SBIR program) will generate approximately between $20M- $50M in revenue in the near to mid-term.

Some of our Fellows were asked to support the White House’s COVID-19 Task Force by leading global teams of medical experts to recommend the best technologies for FEMA to contract. Within the first 30 days of the Task Force, over 3,000 companies were supporting the emergency response to the pandemic. 

In the coming weeks, we will be highlighting more stories from individual Fellows and our host organizations as they personally share the personal and professional impact their Fellowship brought to the US Air Force.

What We Learned

We have designed the Fellowships to be an agile, ever-improving program. Ideally, each cohort leaves the Fellowship stronger than they found it. While our inaugural program was more successful than we could have hoped, there were many things we learned and will improve for future cohorts. We will be discussing this in greater detail in a future post, but to highlight a few:

  • We will extend the curriculum to include more self-paced learning before the Immersion program starts. The day-to-day and evening demands made it difficult for Fellows to combine their Silicon Valley experiences with learning about venture capital and risk management. In the future, Shift will make prerequisite curricula available earlier to enhance the experience. 
  • The cohort model is extremely powerful. It sounds intuitive but we continue to be amazed by the efficacy of teams. The Fellows developed strong bonds with their cohort that we believe will last for the rest of their careers. During the fellowship, the cohort model accelerated learning, enabled knowledge sharing and problem solving, and eased anxiety for Fellows navigating the ambiguity of venture capital.The power of cohorts is causing us to rethink how we approach helping veterans transition to new careers. 
  • You cannot underestimate the experience of fighting in the trenches. We now know relationships can be formed on the foundation of mutual respect between DoD and venture investors in a short period of time...six weeks! A conference can lead to new connections but working side-by-side on an intense project together for weeks creates professional trust that will endure. 
  • Six weeks may be a right amount of time but maybe not the best amount of time. The Fellows accomplished a lot in their six-week program but we plan to experiment on different program lengths in the future. Currently, we are thinking about an eight-week program, which includes either two weeks as a cohort or an eight-week immersion with a host organization. 
  • Speed-to-learning leads to unique responsibility. After their capstone retreat at Napa Valley, one of the Fellows said, “I honestly would not have made it through a single interview at this firm three weeks ago, now I am sitting in General Partner meetings and the senior members of the firm are asking me to be even more vocal when founders are pitching for investment.” 
  • Housing is expensive. The costs of a six-week TDY to Silicon Valley are a huge cost for military units to sustain and limit the amount of DoD organizations who could participate. We are considering ways that the program might minimize housing costs and collaborating closely with the DoD to provide an innovative solution.

What’s Next

The success of our inaugural cohort of Fellows has energized us for what’s next. In March 2020, the US Air Force announced that Shift and 20 other firms would receive four-year, fixed-price contracts worth a combined $550+ million through the AFVentures Strategic Financing (STRATFI) program. This significant expansion to our existing program allows us to open up this unique skill-building Fellowship experience to thousands of Department of Defense members over the next four years, allowing Fellows to experience new industries and learn rapidly through our short-term immersion Fellowships. 

Over the next four years, Shift will facilitate over 50 cohorts of Fellows and over two dozen executive seminars for senior defense leaders at technology companies and venture capital firms across the country. Even as COVID-19 continues to disrupt the best-laid plans, we are working with our DoD partners to develop remote Fellowship options. 

Finally, we are extremely grateful to our industry partners who are investing their time in a public-private partnership that makes us better as a nation. 

Want to Learn More?

  • Learn more about the Fellowship and follow the full story as it unfolds at #AFVentures 
  • Join our list to receive future program updates, application dates, and industry immersion opportunities 
  • Click here if you are an industry partner who wants to team up with the military’s most motivated professionals to bring solutions to our nation’s most pressing defense challenges

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